Entry into Local Retail Food Markets in Sweden: A Real-Options Approach
A real-options approach was used, incorporating uncertainty and irreversibility of investments, to study the number of stores entering the Swedish retail food market during the period 1994-2002. It was found that uncertainty affected the entry-decision. Entry was less frequent in highly concentrated local retail food-markets characterized by a high degree of uncertainty, whereas higher profit opportunities seem to have increased the probability of entry.
Göteborg University. School of Business, Economics and Law
Real options; uncertainty; retail food; entry;negative binomial regression.
Working Papers in Economics, nr 170